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Friday, June 1, 2012

Last Chance Agreement Creates Retaliation Liability - COTW #94

The latest Case of the Week is a rare bird indeed - a summary judgment win for an employment discrimination plaintiff! The case is EEOC v. Cognis Corp., 2012 WL 1893725 (C.D. Ill. May 23, 2012)(EEOC press release here), and it's a retaliation claim arising from a "last chance agreement", or an "LCA" as the cool kids might call them.

As you can probably guess, an LCA is an employee's last chance to get it right. In this case, the employee signed the LCA in lieu of termination, agreeing to "fully comply with all requirements of the job." The LCA included another requirement though:

For and in consideration of the mutual promises set forth herein, Whitlow does hereby release and waive any claim of liability against Cognis, its affiliates, partners, agents and employees, for, on account of, or in relation to Whitlow's rights' [to] employment with Cognis or its affiliates, or his status under this [LCA], and agrees not to commence any action or proceeding, including but not limited to any common law claim or statutory claim under Title VII of the Civil Rights Act of 1964, and similar state or local fair employment practices law, regulations, or ordinance, the Age Discrimination in Employment Act (ADEA), the Rehabilitation Act of 1973, or the Americans with Disabilities Act of 1990(ADA), the National Labor Relations Act (NLRA), the Family and Medical Leave Act (FLMA), or before any state, federal or court or administrative agency, civil rights commission or agency, or any other forum.

And that's where the problems come in.

The employee revoked the LCA because he felt it restrained his civil rights, and was then fired. The Court held:

Whitlow's act of opposing the LCA and revoking his agreement to the LCA because it restrained his civil rights also was protected activity. The LCA, by its clear language, threatens retaliation for protected activity. Cognis' requirement that Whitlow be subject to an agreement restraining his statutory rights to avoid termination is an unlawful employment practice. Therefore, opposing this practice by revoking his agreement to the LCA certainly qualifies as protected activity.

And that's pretty much game over.

The employer advanced an argument that the Court found "defies simple logic." Specifically, they argued that they made the decision to terminate him when they gave him the LCA. Obviously a loser of an argument as the LCA expressly states that "The Company agrees to offer [the employee] the opportunity to retain his position."

I guess the takeaway here is that employers shouldn't present ultimatums to employees to either sign away their civil rights or get fired. In the words of the Court, "[An employer's] requirement that [an employee] be subject to an agreement restraining his statutory rights to avoid termination is an unlawful employment practice."

Note: I pulled some of the facts from an earlier decision in this case, 2011 WL 6149819.

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Produced by Philip Miles, an attorney with McQuaide Blasko in State College, Pennsylvania. McQuaide Blasko also has offices in Hershey and Hollidaysburg. Mr. Miles works in the firms's Litigation and Labor & Employment Law practice groups, providing legal services to employers and employees relating to human resources, employment discrimination, and other employment law issues.